Thursday, February 19, 2015

Today's Headlines: A report on public spending irregularities gives the Mexico City dailies something to feast on

The top federal oversight authority over public spending is known as the ASF, for Auditoría Superior de la Federación. On Wednesday it released its annual report — not for 2014, but for 2013, the first full year of the Peña Nieto administration. That’s how long it takes to put these things together.
    All five major Mexico City dailies front the story, and all five find negative conclusions to report.
    Reforma: “SAT forgives 1.123 billion pesos without justification: Auditor.” The federal tax collection agency (SAT) gave too big a break to five major corporations as part of its program to help taxpayers get up to date. Among those receiving irregular benefits were the snack food company Sabritas, to the tune of more than $929.5 million pesos (about $67 million dollars); Gamesa, another processed food company, $150.5 million pesos; and the financial institution Scotiabank Inverlat, $28.8 million pesos. La Jornada emphasized this finding as well.
    El Universal: “Majority of anomalies in social spending: Auditor.” El U’s approach is to summarize the big picture, reporting that the ASF found irregularities in the amount of  $56.5 billion pesos, with most of that coming from social speeding in such areas as health, social security and women’s economic development.
    Excelsior: “Senate hid $1.2 billion pesos in spending, ASF reports.” The reference here is to the previously reported procedure wherein budgeted funds are distributed to the lawmakers by party to be used in the performance of their duty. Their expenditures are not itemized, hence "hidden."
    Milenio: “Finance Secretariat’s GDP calculation unreliable: ASF.” The tabloid plays up a different ASF contention, namely that the forecasts for annual economic growth issued periodically by the Peña Nieto administration don’t always have much to do with reality. This comes as no surprise to those who pay attention to official GDP forecasts, issued by the Finance Secretariat, called Hacienda in Spanish. Finance Secretary Luis Videgaray had to revise his prediction for 2014 growth from 3.9% to 2.7% before the year was half through, and the final 2014 figure due out tomorrow will likely barely surpass 2%.
    To be sure, other more neutral GDP predictors — such as the Bank of Mexico (the Mexican central bank) and private financial institutions — also had to revise their forecasts downward over 2014. But the ASF found that the Finance Secretariat prediction methodology “may not be statistically reliable.” This matters, because the growth forecast is factored into Congress’s budgeting decisions.
    GDP (PIB in Spanish) forecasts for 2015 are already being taken down. Yesterday the central bank adjusted its 2015 predicted growth range from 3-4% to 2.5-3.5%. Reasons: social unrest, and public spending cuts from the drop in global oil prices.

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